CURRENCY OF TRUST Consumer Behaviors and Attitudes Toward Digital Financial Services in India - Omidyar Network India
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CURRENCY OF TRUST
Consumer Behaviors and Attitudes
Toward Digital Financial Services in India
1
About Omidyar Network Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change. Omidyar Network has committed more than $1 billion to for-profit companies and nonprofit organizations that foster economic advancement and encourage individual participation across multiple initiatives, including Education, Emerging Tech, Financial Inclusion, Governance & Citizen Engagement, and Property Rights. To learn more, visit www.omidyar.com, and follow on Twitter @omidyarnetwork #PositiveReturns.
Table of Contents
Introduction 4
Ten Consumer Insights: Context for Digital Financial Services 6
Five Consumer Personas: Segmentation for Digital Financial Services 24
General Recommendations for Digital Financial Service Providers 36
Three Strategies for Stakeholder Action 40
Conclusion 42
Study Methodology 43
Acknowledgments and Endnotes 46
3
Introduction
The emerging field of digital financial services is experiencing tremendous momentum in India. Efforts are being
made across the board to pave the way for new technologies to fulfill their promise to empower consumers and
change lives. Both private and public sectors are investing in building the infrastructure, products, and support
frameworks needed to drive digital financial services penetration across the country’s complex marketplace. The
entire ecosystem—including mobile network operators (MNOs), financial service providers, banks, regulators,
and the government—is focused on a wide range of initiatives that will enable them to collectively bring mobile-
powered financial services to the broadest spectrum of consumers.
India gives every indication of being “digitally ready,” with over a billion mobile subscribers, 72 percent mobile
phone penetration, including over 250 million smartphones, and an increase in monthly data usage from 89
megabytes per subscriber in 2014 to 240 megabytes in 2016.1 However, at the same time, large segments of
the population remain in digital darkness. Fewer than five out of 10 women own a mobile phone.2 In rural areas,
less than five percent of adults own a smartphone.3 Furthermore, 50 percent of smartphone owners across the
country do not subscribe to data.4
Forecast of Basic and Smartphone Penetration in India Number of
adult Indians
813 875 that own a
776 mobile phone,
684 731
581 605 in millions
36% 40% 44% 50% 50% 46%
28% 32% 54%
60% 56%
64%
72% 68%
2014 2015 2016 2017 2018 2019 2020
Basic/feature phones Smartphones
4
Quality of Coverage
Bad
Good
Excellent
Qualitative estimate based on Airtel Open Network data, 2016
Despite the digital diversity in India, there is great opportunity for digital financial service providers to reach
consumers with numerous form factors and data access scenarios. However, adoption of this technology across
consumer segments has been slow. It is clear that delivering new product offerings to the Indian market via the
mobile phone won’t be successful without a deep understanding of the complexity of consumers’ needs, desires,
and behaviors across such a varied segment base.
Indian consumer segments differ greatly in their aspirations and attitudes toward technology, as well as their access
levels and usage patterns. People exhibit significant differences in their appetites for change and risk, underlying
values and socio-cultural norms, and levels of education and financial literacy, along with an array of multi-dimensional
needs. Digital financial services providers must also understand how to leverage existing frameworks, such as door-to-
door agents and community savings groups, in order to drive sustained behavior change and foster trust.
For this reason, we commissioned a comprehensive research project in 2016 that focused on surfacing the voice
of the Indian consumer regarding adoption and usage of digital financial services. In partnership with Dalberg
Global Development Advisors, we conducted in-depth interviews with 384 people in 30 communities across the
country, analyzed macro-level data sets and trends, and spoke with over 20 industry experts to develop a detailed
understanding of the drivers for the adoption of digital financial services through a behavioral lens.
This report provides a synthesis of the “Currency of Trust” study findings. Ten key insights were gleaned from the many
factors that shape the consumer context. Five personas helped to distill the most influential consumer desires and
challenges around technology, essentially forming a segmentation model for digital financial services.
It is critical that every stakeholder listens to, and understands, the voice of the consumer when undertaking
initiatives aimed at driving adoption of digital financial services. Consumers will guide how this platform unfolds
across India, and the mobile ecosystem must respond accordingly in order to unlock its potential for consumers,
commerce, and the economy at large.
5
Ten Consumer Insights:
Context for Digital Financial Services
The spectrum of digital diversity in India is broad. Consumers across the country present a wide array of needs,
attitudes, and behaviors with respect to mobile technology. Their choices are heavily influenced, not just by
socioeconomic and demographic status and geography, but also by their context, motivations, and barriers faced.
Our in-depth interviews and research surfaced a set of factors that impact the adoption of digital financial
services across our sampling of consumers. These factors help to define the broader context facing financial
services and technology providers in India. They include: access to mobile devices and data services, choice
of devices and applications, gender roles and socio-cultural norms, existing financial services providers and
preferences, digital literacy and self-confidence, data security, and consumer trust.
Based on our contextual findings, we have distilled 10 key insights that drive consumer behavior with respect
to digital financial services. Consumer behavior in the digital ecosystem revolves around preferences for device
and data and various notions of trust, proximity, simplicity, relevance, social collaboration, network effects, and
gender needs. These insights will help innovators, service providers, regulators, and other key stakeholders
better understand how to reach the potential market for digital financial services, as well as how to design
products and services that address consumers’ real needs.
6
Ten Consumer Insights
Smartphone aspiration is driving growth
1
in market penetration. However, a sizable
population will continue to be content
with a basic feature phone.
People are highly frugal in their data use.
2 They proactively seek out creative and
cost-effective ways to access data.
3
The adoption of mobile apps is driven by
data efficiency and social networks.
Greater access to digital finance for
4
women requires developing a “safe
space” that enables them to own and use
mobile phones and data.
5
Digital financial services are viewed as
overly complex.
Even financially savvy consumers are wary
6
of accessing financial services on their
phone and believe that formal financial
services are not for them.
Some consumers may leapfrog directly
7
to digital financial services based on
convenience, relevance, and its alignment
with socio-cultural norms.
Security and fraud concerns around
8 digital financial services must be
clearly addressed.
Financial service agents, particularly those
9 visible and active within the community, are
critical to inspire trust.
Trust must be earned and sustained
10 through continuous reinforcement
throughout the consumer journey.
7
Smartphone aspiration is driving growth in market penetration.
1 However, a sizable population will continue to be content with a
basic feature phone.
Mobile phone penetration in India is expected to rise from 65-75 percent in 2016 to 85-90 percent in 2020,
at which time smartphone ownership will surpass basic feature phones and reach a projected 54 percent
penetration nationwide. For many Indians, the ability to own a smartphone is considered a personal milestone
and a source of pride. Smartphone owners are
perceived as being part of a popular trend, although
ownership in 2016 remained skewed toward those who
“I am very comfortable with live in large cities.
my Nokia keypad phone In the field, we interviewed many people who plan on
and don’t see any utility for spending a significant sum to buy a smartphone. For
example, smartphone ownership aspiration motivates
a smartphone. Internet?
these consumers to consider giving up their first month’s
I don’t use it.” salary, cashing in on their savings, using money earned
Virhulu, weaver and farmer, Nagaland as part of a scholarship, or even taking out a loan.
Hardware quality is also important to people, with price
being a determining factor of quality. We spoke with
many consumers who consider phones costing between
Rs. 8,000 and Rs. 10,000 to be the sweet spot in terms of value for money. Phones costing less are considered to
have low-quality features, such as inferior cameras, poor battery life, and substandard performance.
While consumer interest and adoption of smartphones is growing, there remains a large percentage of
consumers who are comfortable with their basic feature phones and do not plan to upgrade. This is primarily
due to the greater resilience and longer battery life of lower-end phones, particularly in rural locations with poor
connectivity and low-grade infrastructure. Moreover, these consumers do not see the appeal of smartphones and
do not consider internet access a priority.
“I purchased two smartphones
worth Rs. 13,000 each online,
one for myself and one for
my daughter. I’m paying a
monthly installment for
the smartphones.”
Previn, housekeeper earning
Rs. 8,000 monthly, Mumbai, Maharashtra
8
2
People are highly frugal in their data use. They proactively seek out
creative and cost-effective ways to access data.
Despite the projected growth in smartphones over the
next several years, by 2020 only half of smartphone
owners in India are expected to subscribe to network
“I use 2G to download apps,
data services on their device. Consumers tend
to be savvy with respect to “data deals” and will since it is cheaper and the
seek out resourceful and cost-effective ways to speed doesn’t matter for
access data services. Many people, particularly in downloads. I switch to 3G
metropolitan areas and large cities, access free Wi-
when chatting.”
Fi connections through publicly available networks,
such as the RailTEL and Google Wi-Fi services Mahesh, coconut factory employee,
Jhallahundi, Karnataka
available in railway stations. They also seek out
other free providers, such as their employers.
While interviewing study participants, we met some
who had traveled to different cities to register for and receive a SIM card from Reliance Jio, which offers free
access to 4G data for a limited time. We also observed groups of individuals, generally young males, sharing the
installation, running costs, and passwords of broadband networks. In Mumbai’s lower-income neighborhoods,
we found that households will share access to a Wi-Fi router instead of using 3G data. Other savvy users find
creative ways for optimizing data cost and speed, such as switching between 2G and 3G networks based on
their data needs at the time.
“In our village, groups of
local youth pay Rs. 20 to
Rs. 50 each and put up a
local Wi-Fi router and
use it. All of their friends
know the password.”
BH Palkar, store owner, Dahivali
village, Maharashtra
9
3
The adoption of mobile apps is driven by data efficiency and
social networks.
When it comes to choosing which mobile applications to
download and use, Indian consumers are influenced by two main
“I take photos of tomatoes factors: efficiency of data consumption and usage within social
networks. As we have seen during numerous conversations,
and cabbage and send
consumers are highly economical with their data usage and
them to a wholesaler on particularly sensitive with respect to data costs and access. It
WhatsApp, who checks is therefore not surprising that they will favor apps that minimize
their quality and decides data consumption. Moreover, people look for apps that provide
how many bags to buy. an acceptable level of functionality and a satisfactory user
experience, even in poor network conditions.
He then sends me a photo
of a spreadsheet with a Consumer adoption is also influenced by the number of individuals
within a person’s social network who are using the same
calculation of the amount
application. We found that the uptake of specific apps within a
owed. All on WhatsApp.” community is usually due to the recommendations of a “master
Chasu, vegetable trader, Zhavame user.” This is typically a young, technologically savvy male, who
village, Nagaland regularly experiments with new applications. Master users are
frequently approached within their social circle for information on
new and trendy apps, onboarding, and troubleshooting.
Within our sampling, people demonstrated a clear brand association for specific use cases, such as UC
browser—a mobile browser developed by the Chinese company UCWeb, which is owned by Alibaba Group
of China—as a gateway to the internet (to browse content as well as access Facebook), SHAREit and
Xender to transfer content and videos, and MX Player and YouTube to view content. WhatsApp was nearly
pervasive across male smartphone users as it is known to work well even when connectivity is limited. Many
people in both urban and rural areas make ad hoc use of WhatsApp for practical purposes. Examples of
this pattern include: managing supply chains, providing proof of receipt of funds, and managing orders.
10Top Application Categories in India, by Quantity of Data Used
COMMUNICATIONS
WhatsApp
29%
Facebook Messenger
TOOLS
17%
Zapya
SuperBeam Software Data Cable
MEDIA & VIDEO
13%
SOCIAL
13%
Instagram CShare
SHOPPING
8%
OTHERS
20% ES File Explorer KeepSafe
Vault
Analysis of data usage from a sample of Indian Android phones on which mCent was installed, 2015
11Greater access to digital finance for women requires
4 developing a “safe space” that enables them to own and use
mobile phones and data.
To the Indian consumer, smartphones are primarily
associated with entertainment and social media—a
“Girls shouldn’t be given perception that drives a significant gender divide in
device ownership and data usage. There is an inherent
mobile phones. It is not
fear that smartphones will expose women to “bad
appropriate. Who knows influences” and lead to sexual harassment or broken
who they will talk to? I marriages. Many men refuse to provide their wives,
haven’t given a phone to my daughters, or sisters with a smartphone—or in some
girl. She is in high school cases any type of phone. Currently, only 44.1 percent
of women own a mobile phone versus 73 percent of
now, let her get married.”
men, and women comprise only 35 percent of mobile
Masterji, teacher, Masia Bigha internet users and 25 percent of Facebook users.
village, Bihar
We spoke with some women who have internalized
these perceptions and are self-restrictive in their desire
for phones and use of the internet. We met many
women who had smartphones, yet they were “dark users”—did not access the internet at all. Those who used
data services specifically avoided WhatsApp and Facebook. They were worried about inadvertently accessing
videos and images that were inappropriate for them. More importantly, many women said that using such apps
would make their husband suspect that they may be talking to other men. Multiple men and women told us that
newspaper articles and television news reported that social media usage by women leads to extramarital affairs
and divorce.
“As a woman, I should
only use good things on
the phone. So I don’t use
WhatsApp or Facebook
but just use my phone for
calling. We saw on a TV
show that internet leads to
divorce and broken families.”
Deepa, homemaker, Bengaluru,
Karnataka
125 Digital financial services are viewed as overly complex.
Many consumers across India who have access to a smartphone and the mobile internet are quick to experiment
with connected services on their device. They are willing to engage in a wide range of digital experiences, either
for entertainment or practical purposes, such as: shopping, movie streaming, video playback, file sharing,
information browsing, and social media communication.
However, in the course of this study, we did not observe such exploration with respect to digital financial
services. Even the most advanced users do not seem to naturally transition to experimental or sustained usage.
We spoke with many people who perceive digital financial services to be more complex than other types of
connected services. They consider those users who can understand and navigate financial service apps as
having a specialized skill. In addition, we found that many people have difficulty grasping related product
offerings, financial services language, and legal terms and conditions.
Trust has always been the cornerstone of the banking and financial services industry. Juntos, one of Omidyar
Network’s portfolio companies, is an automated mobile conversation platform that empowers newly-banked
consumers to increase usage of their dormant financial services accounts. Much of their work in markets around
the world centers on questions of confidence and trust with respect to digital financial services. Juntos breaks
down the key issue of trust into a framework of three levels, which they call the “three economies of trust”:
1) Trust in the provider, which is well-understood and usually emphasized
2) Trust in the digital product or service and its ability to work as expected
3) Trust in oneself, which is normally least appreciated, but most important
“WhatsApp and watching
videos is one thing.
Who wants to get into
all this brain-bashing
stuff of online transaction?
We don’t want all
the headache.”
Kaushik, street hawker, Hyderabad,
Telengana
13Financial services providers spend most of their time
and resources building provider trust through their
brand. However, this is likely to be the least important
“Having a simple and guided
focus area, especially if there is a lack of trust in
few steps process with
the other two areas, product and self. Our research
clear instructions for money indicates that one of the biggest hurdles today for
transfer would be quite cool.” Indians with respect to digital financial services
adoption is the lack of trust in their own abilities.
Pavan, college student, Karjat town,
Maharashtra Many first-time users neither trust themselves nor the
product, and therefore experience a high degree of
risk. It is important to lower the stakes for these users.
Migrants in urban areas, despite being regular users of
entertainment and communication applications, still use more traditional services for sending money home. They
will opt for third-party remittance providers or informal means of remittance, as opposed to engaging in digital
financial services directly through apps on their mobile device.
14Even financially savvy consumers are wary of accessing financial
6 services on their phone and believe that formal financial services
are not for them.
Going beyond digital financial services, a significant
population in India does not consider formal banking
to be a viable option. Many villagers have multiple bank
“The gold loan agent speaks
accounts due to various government schemes; however,
this has not resulted in everyday use of these accounts politely and offers me water.
or on-ramp to other formal financial services. Due He patiently explains the
to the complexity of their financial lives, they choose loan process. Also, I get the
alternative financial services or informal means for
loan within a few minutes.”
saving and borrowing money, viewing these as more
appropriate to meet their needs. Mangai, homemaker, Chennipulamulli
village, Karnataka
This belief stems from a combination of three factors:
1) a perception that banking is only for large ticket
transactions; 2) a lack of ability to understand financial
services due to heavy usage of jargon and content not found in the local colloquial language; and 3) apathy and
outright disrespect experienced by many during interactions with formal financial service providers.
As a result, there is a strong preference for alternative services, such as self-help groups (SHGs), microfinance
institutions (MFIs), chit funds, savings associations, loans against gold holdings, and private moneylenders.
Informal approaches to saving and borrowing are also common. Multiple people told us: “Yes, I have a bank
account, but when I need to borrow money, I do it from friends or relatives.” We came across many people like
Manoj, a street hawker in Bihar, who had saved money in a “secret” compartment in his wallet for two years to
buy his first smartphone. Though Manoj has two bank accounts, he rarely uses them.
“I save money in a special box at
home labeled ‘sister’s wedding’. I
have a bank account, but who wants
to go to the bank to deal with the
hotchpotch? We are illiterate and
happy with our way.”
Sone, street hawker, shuttles between Patna and
Champaran village, Bihar
15Some consumers may leapfrog directly to digital financial
7 services based on convenience, relevance, and its alignment
with socio-cultural norms.
Despite the low comfort level and lack of familiarity with digital financial services, many Indian consumers
expressed a willingness to start using such apps under certain circumstances. If the technology addressed
unmet needs, offered convenience, and did not challenge established socio-cultural norms, some consumers are
likely to leapfrog formal financial services and go directly to digital financial services.
Consumers want financial solutions which offer value propositions that fit the existing context of their lives.
Consumers make multiple decisions on a daily basis to manage their limited income to meet their needs. They
seek solutions that provide them with greater control of their money by balancing their need for flow (availability of
cash as needed) and illiquidity (simple barriers to prevent withdrawal of any savings for discretionary purposes).
To shift consumers from existing informal cash–based financial solutions to formal digital financial products,
solutions need to capture the full relationship and experience of money in their lives. Most financial products are
designed for a specific use. However, customers do not necessarily think in terms of products. Instead, what they
seek are tools that address their latent needs. As the value proposition in terms of usability is low, we see high
dormancy rates across financial products.
Simple design changes to the user interface of digital accounts, like allowing consumers to create
partitions (virtual jars) for the money stored in the account, can resonate with their current practices and
needs. They then become tools that can help small businesses manage cash flow or housewives manage
household expenditures.
“My wife handles all
the subsidies and loan
repayments. She gets
messages on her mobile
phone about that. I don’t
mind if she manages all
this on her phone.”
Govindraj, garland maker,
Chennipulamulli village, Karnataka
16A common reason cited for adopting digital
financial services was an emergency or last minute
expenditure and no cash in hand. For example, “Two days after demonetization,
Sumesh, a stockbroker, told us that he had resisted I took my 3-year-old daughter
using financial apps. However, one night he had to
to the government hospital
use an app to make a late payment in order to meet
a billing deadline. He has continued using digital
45 minutes away to have her
financial services ever since. tested for tuberculosis. But
they refused to accept my old
During many conversations, men expressed
acceptance of their wives saving money, and
notes, even though Modi said
potentially adopting digital means to manage hospitals should accept them.
the money—as long as the money was meant for If at that time someone had
their children’s future or household emergencies. told me about digital financial
This offers an emerging space for women to use services and taught me how to
digital financial services to manage family
use them, I would have.”
finances, including small credit portfolios and
government subsidies. Ayesha Patel, homemaker, Mumbai,
Maharashtra
178
Security and fraud concerns around digital financial services
must be clearly addressed.
Heightened awareness and concern about banking-
related fraud in India has produced a general mistrust
“Most of us get SMS in English of digital financial services. Heavy media coverage,
from banks. It would be great extensive hearsay, and precautionary communications
to get them in Kannada so that from banks have amplified this mistrust as consumers
hear stories about impersonations, ATM fraud, and
we can read them. I understand
other scams. When asked, many people admit that it
numbers and the days of the has never happened to them, but they have either heard
week in English, but all the rest about it through a trusted source or seen it in the news.
has to be in Kannada.” Rajat Sinha, chief manager of Allahabad Bank, Patna,
expressed: “People nowadays have a perception that
Umesh, moneylender, Chennipulamulli
village, Karnataka fraud happens, and hence don’t do mobile banking.”
We spoke with many people who had received repeated
proactive messages from banks reminding them to
change their ATM PIN number frequently, be wary of fraudulent calls, and look out for other scams. This increased
emphasis on fraud coming from banks makes people doubt the safety of the banking system itself. They believe
that banks are not in full control of the money entrusted to them, prompting consumers to consider other options.
Another factor that emerged was consumer misunderstanding of banking terminology, such as the difference
between a PIN and an account number. Many people we interviewed were also confused over which types of
banking information can and cannot be shared. A garland maker told us that she did not allow her informal savings
group to deposit money directly into her bank account because her bank had asked her not to give her account
number to anyone. To be safe, many consumers prefer to manually deposit cash themselves rather than share their
account numbers with others.
Looking at the application user experience, consumers widely appreciated two-step authentication measures,
such as a one-time password (OTP), which help to build trust. However, many users told us that they would need
assistance with the first few transactions, along with an auto-read feature for SMS and a user experience that
allows them to toggle between SMS and the app without logging out of the session.
“Wow, I didn’t know that there is already a
security system in which I can get an SMS on
my mobile with a one-time password to use
for authentication of online payment. But how
do I copy it without exiting the app?”
Sunil, Britannia distributor, Dahivali village, Maharashtra
189
Financial service agents, particularly those visible and active
within the community, are critical to inspire trust.
For customers, service proximity means touchpoints that are
frequent and available when they need help, rather than simply the
location or number of bank branches. Many consumers in India
“The same loan agent has
are comfortable interacting with in-person banking agents for
their financial services needs due to the local agents’ proximity, been coming to the village
familiarity, and respectful conduct. The number of agents across every week for about 20
the country has been growing at approximately 50 percent year- years. He doesn’t cheat us
on-year since 2013. However, this still leaves India lagging far
and explains things to us.
behind many other developing countries (see next page).
He asks if we need money.
Agents not only provide financial services on behalf of their He calls to remind us of loan
customers, but they also assist with basic tasks, such as filling
repayments. We have never
out deposit slips. Moreover, the trust established through
such interpersonal relationships prompts many people to rely
had a problem.”
on agents for financial advice. Agents proactively reach out Shantama, homemaker, Magasapura
to customers in rural areas on a regular basis, keeping them village, Karnataka
informed of relevant schemes and products, reminding them of
loan repayments, and encouraging them to save money. Such
interactions make customers feel that the agents are looking out
for their interests.
With regards to digital financial services, many people will browse the internet on their mobile device to
research financial products, yet they still want the initial transaction to be in person. However, once established,
consumers expressed a strong interest in accessing and managing their financial products through a
mobile application.
19Number of Bank and Non-Bank Agents5 per 100,000 Adults, 2014-15
579
527
270
486
525 Estimates of
177 non-banking agents
unavailable.
Bank correspondents
numbers have been
growing at around
50% YOY since 2013.
270
177
93
68
2
Kenya Tanzania Brazil Pakistan India
Banking agents Non-banking agents
2010
Trust must be earned and sustained through continuous
reinforcement throughout the consumer journey.
To drive adoption in the Indian market, digital financial service providers must lower barriers for people at every
point along the consumer journey and pay particular attention to first-time users. Apps must be carefully designed
to build trust and grow with the user as he/she becomes more confident and familiar with the experience and
service. During our study, several key focus areas emerged with respect to consumer engagement.
Onboarding and first use
Consumers express a strong preference for an onboarding process that: 1) explains the relevant use cases, 2)
provides access to the service, 3) helps them complete registration, and 4) guides them through the first few
transactions. Many users state that bank agents download mobile banking apps on their phones, but do not
explain the functionality and use of the app. As a result, they delete the apps without using them.
Simple, clean UI/UX
An uncluttered user interface (UI) and easy-to-understand user experience (UX) can dramatically improve
consumer adoption. Many app users are overwhelmed by a complex interface, especially during the first few
transactions. They lack confidence when entering personal details (e.g., account or PIN number), fearing that it may
result in fraud or lost money. Widely appreciated are UIs that feature “tap not type” input, communicate in a local
colloquial language, include a heavy use of images, and are free of financial service jargon. Also important is a UX
that focuses on one use case at a time, without multiple options that may confuse users.
“When I went to ICICI bank,
they installed the mobile
banking app in my mobile
and taught me how to
register and use it. Now I use
it to recharge my phone and
check my balance.”
Victor, store owner, Kohima, Nagaland
21Human-Centered Design in Practice: Prototyping Sessions in the Field
Identifying use cases
We facilitated discussion using prompt/trigger/
provocation cards in order to understand if
consumers were able to identify with the UI for
potential use cases.
Learning
Semi-literate villagers and informal financial
service providers (SHGs, private finance) were
interested in graphically rich mobile apps that
track household expenses and maintain digital
customer credit records. They wanted image-
based user experiences that use graphics or
pictures to represent key information.
Identifying interface requirements
We facilitated discussions using relationship
charts and mobile phone stencils to understand
the UI/UX requirements, specifically those related
to the language of digital financial services.
Learning
Semi-literate villagers were excited about
having instructions in their local language
(Kannada) rather than in English. They also
expressed a desire to receive communications
via SMS on loan repayments, bank
transactions, and subsidies in Kannada.
22Start with small payments
During early usage, consumers are more comfortable transacting with small amounts of money. As they build
trust and become more familiar with the service, they are more open to transacting with progressively larger
sums. Users fear that they may lose money due to their inexperience, and therefore tend to mistrust the service
itself. Micro-transactions are perceived as a safer way of trying out a new service while keeping risk contained.
Proof of transaction
Across formal and alternative financial services, consumers value some form of proof for both successful and
incomplete transactions. Similarly, with digital financial services, apps that send instant notifications after
processing (e.g., via SMS) help reassure users and reinforce trust in the service. Users worry about what will
happen to their money if a digital transaction fails during processing. In this case, providing evidence of a failed
transaction is an important driver of a positive user experience.
On-demand help
When they get stuck, users want their app to know where they are in the process and provide specific, easy-to-
follow assistance on demand. Such features also help consumers overcome a lack of confidence and perception
that they may not be sufficiently educated to use digital financial services. We spoke with several people who
expressed a desire for a clear path to grievance redressal on their mobile phone, stating that it could be used to
tackle cheating by middlemen.
23Five Consumer Personas:
Segmentation for Digital Financial Services
Our 10 insights provide a contextual basis for understanding the issues and opportunities facing digital financial
service providers in India. However, success in this market will require a more granular understanding of specific
consumer behaviors, desires, and challenges—which can vary substantially. Driving penetration of digital
financial services clearly requires designing products that are tailored to meet the particular needs of each
consumer segment within its technological boundaries.
For that reason, we took a deep-dive into the data collected from our study participants to gain further insight
into the hearts and minds of the Indian consumer. We noticed that an individual’s adoption of digital financial
services is influenced mainly by individual personality traits, socioeconomic status, and access to technology.
Socioeconomic status was defined by geographic location (from rural to urban), income level (low to middle),
and the influence of socio-cultural norms and boundaries.
Two frameworks helped us synthesize and articulate our analysis:
1) Personality traits: Identifies four personal and community drivers and their degree of influence on
the individual.
2) Persona profiles: Identifies five distinct consumer “types” that exhibit shared characteristics and
personality trait maps.
24Personality traits
While there are many possible individual personality traits that could
potentially drive adoption of digital financial services, we identified
four traits that appear to have the greater influence. We looked at
how individuals think about their lives and future, how they value their
ASPIRANTS
families and communities, and how they conduct themselves in their
daily routines at work and at home.
A
mbition: Given their circumstances, how motivated is the
person to improve his/her life and take chances to achieve goals?
R
esourcefulness: How resourceful is the person within
limited means?
R
esponsibility toward community: How much of a sense of
COLLABORATORS
obligation does the person feel toward his/her community?
R
eceptiveness to network: To what degree is the person’s
behavior influenced by the people around them?
Persona profiles
By creating personality trait maps for various groups of interviewees,
we noticed five distinct persona types emerge. Each persona exhibits
CONFORMISTS
a set of shared attributes, including attitudes, behaviors, and needs,
that are intertwined with their socioeconomic and demographic
status. The five persona profiles are further segmented into 2-3
variants that provide more granular detail.
Each persona type requires a different pathway through which
consumers may initiate or increase engagement with digital financial
services. It’s also important to note that some segments may serve
as a gateway to engaging a wider pool of potential adopters. MASTERS
We have also estimated the potential addressable market associated
with each identified persona. Given the challenge of sizing consumer
segments based on personality characteristics, we have relied on
simple demographic and behavioral characteristics to come to
approximate sizes for these consumer segments.6 The rationale for
each potential addressable market sizing is included within each
persona profile. Due to the methodology used, these numbers should
be considered directional and relative estimates rather than precise PRAGMATISTS
market segment sizings.
25ASPIRANTS
Aspirants are eager to move with the times and
are influenced by the latest trends. They believe
in the potential of technology, although they’re
still in the process of discovering how it can
improve their lives. Aspirants look forward to
becoming financially independent and making
their own decisions.
How to identify them
Young adults seeking financial independence
Desire to own a smartphone
Eager to adopt the latest trends
B
elieve in technology to help them improve their lives
F
ind creative ways to save money or borrow
smartphones
H
ighly influenced by friends and relatives in
aspirational areas
Equally at ease with forming their own ideas
What do they want?
Gain understanding of digital financial services
Try financial apps with confidence and trust
Handle digital payments responsibly
“I use my friends’ mobile for
B
ecome financially independent and make their
WhatsApp and Facebook. I want
own decisions
to shop from Myntra when I get
my smartphone.” Save money to buy the latest smartphone
Sahil, engineering college student,
Rajgir-Nalanda town, Bihar
26ASPIRANTS
Persona variants TRENDSETTER
T
rendsetter – borrows smartphones from friends
and aspires to own whatever is newest and trendy Basic phone Wi-Fi
R
estrained – secretly borrows smartphones despite
SOCIOECONOMIC CONTEXT
being prohibited from using them
Rural Urban
S
triving – struggles to save enough for a smartphone,
Low Middle
but intends to buy one as soon as possible income income
Low restrictive High restrictive
Potential addressable market7 environment environment
Aspirants are a relatively large segment on the cusp
of digital, as well as financial, adoption. They are
RESTRAINED
generally men and urban or rurban8 women between
the ages of 15 and 30 years who own a basic feature
phone, but aim to upgrade to a smartphone soon. Basic phone No internet
This demographic group represents an estimated
155 million people. We can also estimate this SOCIOECONOMIC CONTEXT
segment size by looking at current smartphone growth Rural Urban
trends—among the 15-30 age group, about 115 million
Low Middle
more people are expected to own a smartphone by income income
2020, many of whom are likely to be Aspirants. Low restrictive High restrictive
environment environment
Recommendations to financial STRIVING
services providers
C
reate awareness of specific use Basic phone No internet
cases for mobile services
Design apps with a simple user experience, SOCIOECONOMIC CONTEXT
well-defined focus, and clean, trendy design Rural Urban
O
ffer money-saving schemes and incentives Low Middle
income income
P
rovide positive communication Low restrictive High restrictive
environment environment
around app security features
E
nable offline mobile payments to
overcome poor connectivity
27COLLABORATORS
Collaborators live in close, trusted,
and supportive relationships with their
communities. They rely on the community for
guidance and are actively engaged in a range
of community groups and schemes.
How to identify them
S
hare a strong drive to take care of their community
R
ely on their community or trusted agents for
guidance and advice
Participate
in community-based savings and loans
programs
L
ack confidence with banks, believe that banks are
not for them
F
ocus on day-to-day needs and saving for occasional
basic expenditures
R
esourceful with finding supplemental income
In
constant need of credit, often borrowing from
multiple sources
What do they want?
Communications
in their local language
T
o be treated with respect by financial service staff
“The self help group gave me an T
o break the cycle of taking multiple loans to make
identity and a community to rely ends meet
on. You can get a loan with a
E
asier ways to keep track of terms and payments on
2 percent interest rate. But I’m not various accounts
sure if I will get my third loan.”
Kallash Devi, farmer and laborer, Uthavalli
village, Karnataka
28COLLABORATORS
Persona variants FOLLOWER
F
ollower – joins community-based lending
groups, but has little understanding of the No phone No internet
processes involved
SOCIOECONOMIC CONTEXT
S
elf-starter – juggles multiple jobs and loans to
Rural Urban
support the family and is resourceful in finding
credit schemes Low Middle
income income
Low restrictive High restrictive
Potential addressable market7 environment environment
Collaborators are a relatively large segment,
generally comprised of people between the
ages of 25 and 50 who live in rurban8 or rural SELF-STARTER
areas. Men in this group own a basic phone or
a “dark smartphone” (with no internet access), Smartphone 2G Data
while women do not typically own a phone. This
demographic group represents an estimated SOCIOECONOMIC CONTEXT
250 million people. Collaborators favor traditional
Rural Urban
sources of credit, so we can also approximate
Low Middle
the group size by estimating the number of men income income
participating in chit funds and women participating
Low restrictive High restrictive
in SHGs, which is roughly 185 million people. environment environment
Recommendations to financial services providers
C
reate Unstructured Supplementary Service Data (USSD)-based financial services apps for basic
feature phones
C
reate awareness of credit availability
Digitize
existing community-based groups
Provide
agent-assisted onboarding and help with first few transactions
C
ommunicate jargon-free and in the local language
E
nsure multiple, free ways to access and store transaction details
29CONFORMISTS
Conformists operate within strict boundaries
that are defined by their family and community.
They have access to technology, but hesitate
to take full advantage of it—even if they see its
value and potential.
How to identify them
R
estrained by family and established
socioeconomic norms
H
ighly controlled internet usage by male
family members
A
void conflict and happy to follow the rules
H
appy to explore when restrictions are eased
S
ave money secretly for future family needs
H
ave access to technology, but are hesitant to take
advantage of it
F
ocus on their family rather than advancing their
own lives or careers
What do they want?
Independent access to the internet and mobile phone
E
asier ways to track their “hidden” savings and manage
household expenses
“I watch TV9 reality show Useful
online resources to help their children’s
education and family well-being
with my husband and in-laws
every evening. They show how
excessive use of internet can lead
to broken families.”
Deepa, homemaker, Bengaluru, Karnataka
30CONFORMISTS
Persona variants TRIER
T
rier – is curious about e-commerce apps
Smartphone Wi-Fi & 3G Data
but also wary of online identity theft
H
omemaker – uses a smartphone but is SOCIOECONOMIC CONTEXT
closely monitored by her husband
Rural Urban
Low Middle
Potential addressable market7 income income
Low restrictive High restrictive
A relatively small segment, Conformists are environment environment
generally women between the ages of 20-50
in rurban8 or urban areas who own a
smartphone. Excluding high-income women, HOMEMAKER
this demographic group represents an
estimated 25 million people. We can also
Smartphone 2G Data
approximate this group size by estimating the
number of women who seem to refrain from
SOCIOECONOMIC CONTEXT
using social network services like Facebook
Rural Urban
(as compared to usage by men), which is an
estimated 20 million people. Low Middle
income income
Low restrictive High restrictive
environment environment
Recommendations to financial services providers
D
esign apps with image-based UIs to keep track of savings hidden around the house
R
eposition the prime purpose of mobile internet usage away from social media and toward
family-focused use cases
I nclude family during onboarding to help build trust
E
nable anonymous logins to support trial transactions and build confidence
P
rovide free or heavily discounted data plans to help control costs
I nclude a help or complaint button for immediate redressal
31MASTERS
Masters are the “go-to experts” for their
community, providing updates and information
on all things new and innovative. They thrive
on the social standing that results from their
initiative and intelligence, and continuously seek
ways to build relationships.
How to identify them
G
o-to experts in their community, helping to introduce
new things
O
utgoing, social, thrive on community status and being
seen as a pioneer
A
mbitious, resourceful, often juggling multiple jobs to
earn extra income
R
egularly experiment with new products, services,
and technologies
S
ome are entrepreneurial, starting new businesses
or initiatives
A
ppreciate technology that helps them connect
and share
E
xperts at finding deals, such as free internet access
What do they want?
“I set up a mobile data hot spot E
asier tracking of multiple sources of income
using a spare phone in my store, C
heap and reliable ways to access the internet
so my customers can access G
ain expertise in digital financial services
free 2G internet. This boosted
my business.”
Ramesh, mobile and Xerox store owner,
Utharthu village, Bihar
32MASTERS
Persona variants NETWORKER
N
etworker – uses the internet heavily for
entertainment, social networking, but is Smartphone Wi-Fi & 3G Data
uncomfortable with online transactions
Entrepreneur – runs a business that sells mobile SOCIOECONOMIC CONTEXT
phones and other technology-related services
Rural Urban
Activator – sets up SHGs and encourages women
to do the same Low Middle
income income
Potential addressable market7 Low restrictive
environment
High restrictive
environment
The Masters are a relatively small group; however,
they are highly influential within their network. Female
Masters tend to be between 25 and 50 years of age,
live in rurban8 or rural areas, and own a basic feature ENTREPRENEUR
phone, while male Masters tend to be between 15 and
35 years, live in urban areas, and own a smartphone. Smartphone 2G/3G Data
In both cases, Masters set themselves apart from their
demographic segment by being recognized as experts
SOCIOECONOMIC CONTEXT
that have especial influence in their networks. Given
these characteristics, and excluding high-income Rural Urban
individuals, we estimate roughly 12.5 million people
Low Middle
in India are Masters. We could also approximate this income income
segment size by looking at young men, who are the Low restrictive High restrictive
most sophisticated users of smartphones and data, environment environment
and females who lead SHGs. These groups represent
an estimated 25 million people.
ACTIVATOR
Recommendations to financial Basic phone No internet
services providers
L
everage agent network to raise awareness SOCIOECONOMIC CONTEXT
of USSD apps and amplify outreach
Rural Urban
D
esign dedicated apps that offer a
Low Middle
single, well-defined focus and build income income
trust around transaction security
Low restrictive High restrictive
O
ffer ongoing deals and incentives to environment environment
drive sustained usage
P
rovide various forms of help, including
online and offline, to build confidence
33PRAGMATISTS
Pragmatists take initiative, whether in starting
a business, advancing their careers, or taking
care of their families. They are fundamentally
practical, prioritizing ease, convenience,
efficiency, and cost.
How to identify them
P
roactive and entrepreneurial in many areas of
their lives
C
lear personal and professional goals, continuously
looking for ways to grow
P
rioritize ease, convenience, efficiency, and cost in
decision-making
C
arefully weigh any advice against their own priorities
W
illing to experiment, but reluctant to commit when
they experience challenges
L
ook for cost savings and incentives
What do they want?
A
ctively interested in digital financial services,
but want more than simply mobile top-up and
bill payments
M
obile apps that can operate in low
connectivity areas
“I have PayTM-enabled digital
payments in my store but few G
ain trust in order to try higher-value
digital transactions
customers use it. Wholesalers
don’t accept digital payments but C
onvenient and cost-effective solutions
will in the future.”
Aditya, Hot Chips store owner,
Bengaluru, Karnataka
34PRAGMATISTS
Persona variants ENTHUSIAST
Enthusiast – invests in in-store digital payment
Smartphone Wi-Fi & 3G/4G Data
systems with the expectation of growing usage
in future
SOCIOECONOMIC CONTEXT
Reserved – avoids complex apps and prefers to
Rural Urban
use his mobile phone for simple use cases
Low Middle
income income
Potential addressable market7 Low restrictive High restrictive
environment environment
Pragmatists are a mid-sized segment group that
has the potential to be high-value users. They
are generally men between the ages of 25 and
RESERVED
50 who use a smartphone with data services.
Excluding high-income men, this demographic
Smartphone 2G/3G Data
group represents an estimated 60 million people.
The most common place to find Pragmatists would
SOCIOECONOMIC CONTEXT
be among infrequent user base of mobile banking
Rural Urban
apps and digital wallets, as well as e-commerce
apps, such as IRCTC and Flipkart. Low Middle
income income
Low restrictive High restrictive
environment environment
Recommendations to financial services providers
I ncrease usage by promoting a variety of use cases
D
esign apps with a simple, intuitive UI and single, well-defined focus
P
rovide agent assistance with onboarding and guided demonstration of use cases
E
mphasize convenience and data security of financial services apps
W
aive convenience fees for online transactions and SMS receipts
P
rovide instant and clear digital receipts, especially for failed transactions
35General Recommendations for
Digital Financial Service Providers
During the process of analyzing field data and defining the five personas, we identified commonalities within
each that formed the basis of our recommendations to digital financial services providers and stakeholders.
We then mapped those recommendations across the technology consumer journey, which includes four
stages: awareness of use cases and potential, onboarding and trial, early use, and long-term use. We looked
at an additional layer of help and redressal that impacts usage.
The five persona profiles in the previous section include a summary of our top insights and recommendations
tailored to each group.
For a higher-level view, we’ve distilled the following general recommendations that universally apply
across personas.
36Stages of the Consumer Journey
STAGE 1
Use cases
Create awareness of specific
use cases that reframe the
benefits of mobile.
STAGE 2
Onboarding
Offer guided onboarding
and handholding for the
first transaction.
Present a clean user
experience, free of financial
services jargon.
STAGE 3
Early use
Make new customers
comfortable by providing
trust-building services,
coupled with incentives
to motivate use where
appropriate. Help and
redressal
Offer consistent
and easy access
to immediate help.
STAGE 4
Sustained use
Provide incentives
after initiation.
37STAGE 1 Awareness of use cases
Create awareness of specific use cases that
reframe the benefits of mobile.
Many people are dubious about the suitability of
using smartphones and mobile internet, especially by
women. For women across personas, it is important
for digital financial services providers to reposition
the prime purpose of mobile internet toward socially
acceptable use cases, such as education and health,
and away from those considered inappropriate, such
as entertainment and social media.
STAGE 2 Onboarding
Offer guided onboarding and handholding for the
first transaction.
Across personas, people want agents to demonstrate
how to use digital financial services and walk them
through all possible use cases, including app installation.
Some are excited about the possibility of carrying out
dummy transactions with their agent or a vendor before
transacting with money. A focused and highly supportive
onboarding experience helps build familiarity and
confidence with using an app from first use.
Present a clean user experience, free of financial
services jargon.
Many consumers express a strong desire to have
all communication from financial service providers,
including calls, texts, handouts, and in-person
conversations, be free of financial services jargon as it
makes them feel “uneducated.” With apps, they want a
clean and focused user interface so that they can easily
find what is required and successfully accomplish their
intended actions.
38STAGE 3 Early use
Make new customers comfortable by providing trust-
building services, coupled with incentives to
motivate use where appropriate.
For many consumers, one of their biggest fears
with using digital financial services is unintended
consequences due to a failed transaction. To overcome
this fear, consumers who have used such services often
start with small ticket transactions. They progress to
transacting with larger amounts once they are familiar
with the application and have gained confidence in their
ability to understand and navigate the experience. Apps
further support this journey by building in features that
enhance consumer trust, such as allowing users to save
information while they move between applications.
Offer consistent and easy access to immediate help.
For many, a complaint or help button is essential to
overcoming the education barrier. When faced with a
problem, users don’t know who to turn to and believe that
a redressal button for immediate troubleshooting would
be beneficial. Some also want “smart help,” which can
detect where they are stuck, point out any mistakes, and
guide them toward successfully completing their action.
STAGE 4 Sustained use
Provide incentives after initiation.
Across all personas, people are excited about digital
finance because of cashbacks and incentives. They
express interest in free or discounted data plans by Jio,
Idea, and others, and want the cashbacks and incentives
to continue post-initiation. Industry experts also spoke
about potentially incentivizing digital credit by gamifying
credit scores. For example, people with high credit scores
would get preferential treatment with PayTM, banking
websites, railway tickets (IRCTC), and others.
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